Saturday, April 5, 2008

When Blood is Running in the Streets

I guess I can't say it surprises me. In a Friday article in the New York Times, entitled, "Investors Stalk the Wounded of Wall Street," the Rothschilds are quoted as saying: "The time to buy is when blood is running in the streets."

Hedge funds managers specializing in 'distressed' businesses, ironically, are usually formerly distressed businesses themselves. For example: Countrywide Financial Corporation, one of the pushers of subprime lending. From the article:

A former executive of the Countrywide Financial Corporation, one of the mortgage giants that fostered subprime lending, recently helped start a company — to buy mortgages. And executives of the Blackstone Group, those lords of the now faded buyout boom, just raised $10.9 billion from investors to scoop up real estate.
The vultures are betting, and betting big, that some people have thrown the good out with the bad, and that the prices of some investments have simply fallen too far.

Amazing? Not exactly. 'Opprtunity investing,' as it is called in the business, is quite commonplace in times of panic. As I remember from the documentary, The Corporation, a Wall Street Commodities trader was quoted as thinking that when the World Trade center was destroyed: "With disaster comes opportunity."

This is exactly why these scumbags need to be seriously regulated. We, the mere mortals, are just pawns in their shell game.

From the article again:

“There are a lot of dead carcasses on the road, and the vultures are out sniffing,” said Andy Kessler, a former hedge fund manager. “This is the cycle of Wall Street. When bubbles crash, you get the value guys who come in and say, ‘This thing is cheap.’ ”

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